You are here

Oil companies may boost E&P spending after 2 years of declines: Barclays

Monday, January 9, 2017 - 21:40

27_40814024 - 09_12_2016 - BARCLAYS-BRITAIN_.jpg
Global oil and gas companies are expected to raise exploration and production (E&P) spending in 2017 by 7 per cent, marking the first increase in three years, Barclays said on Monday.

[BENGALURU] Global oil and gas companies are expected to raise exploration and production (E&P) spending in 2017 by 7 per cent, marking the first increase in three years, Barclays said on Monday.

Oil prices have recovered after a more than two-year slump caused by a glut due to US shale oil flooding the market. Prices have risen about 21 per cent since Opec, which accounts for a third of global oil output, signed an agreement in November to curb supply.

Brent crude futures were down 2.03 per cent at US$55.94 a barrel at 1214 GMT on Monday. Prices had fallen to a more than 12-year low of US$27.10 last January. "With Opec putting a floor on oil prices, operators have greater confidence to drill and complete, although the early stages of the recovery will be uneven," Barclays analysts wrote in a report.

Barclays also said it expects North American oil companies to lead the spending growth with a 27 per cent jump. Production, however, is expected to fall as higher service costs are likely to dilute the effect of a larger budget, the brokerage said.

sentifi.com

Market voices on:

International spending is expected to increase 2 per cent, according to Barclays' survey of 215 global oil and gas companies. The survey was conducted when Brent was trading at about US$55 a barrel and WTI at US$50 a barrel.

Spending on offshore projects is expected to fall 20-25 per cent in 2017, compared with estimates of a 34 per cent fall in 2016.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom